Tip jars are an essential means for compensating workers in many different industries. Tips boost company morale, supplement workers' wages, and give customers a channel through which to show their appreciation for good service. For service-orientated companies—companies for which tipping is a central aspect of the customer's daily experience—employees are the face of the company to customers and almost completely dictate customer satisfaction. Over the past 15 years, tip jars have found their way onto the counters of many establishments that customarily would not have solicited tips from their customers including coffee shops, delis, fast food restaurants, retail stores and other for-profit businesses and non-profit organizations. Additionally, cash collection receptacles resembling tip jars in form and function are also widely used by charitable organizations that solicit small donation amounts from passers-by.
Meanwhile, credit card companies have ceased requiring signatures on purchases under $25, and consumers have become increasingly comfortable swiping on the go. In fact, billions of dollars are spent on products and services costing $25 or less, such as fast food, magazines, manicures, etc. As credit cards have become the standard method of payment for even the smallest and most casual purchases, the technology used for small cash gratuities has not kept up with the payment technology in consumers' pockets. With less spare change and small bills on hand, consumers have no easy way to leave gratuities to counter retail employees; tips to hospitality, salon, or valet employees; and donations to charities or cultural institutions that solicit from pedestrians, among others.
Increased use of credit cards for small purchases alongside increased reliance on tip jars to incentivize and compensate service workers reveals a distressing picture. Together, these trends mean billions of dollars of uncollected tips—tips customers would likely leave if tipping technology caught up to payment technology—tips that could be going into workers' pockets and, ultimately, into the economy overall. Accordingly, there is a need for a technological innovation that allows consumers to perform small gratuity transactions with credit and debit cards.